spectrum limitations migration to ngmn: a growth market dilemma?

09/04/23 1

Spectrum limitations migrating to NGMN:a growth market dilemma? 5th Annual Mobile Network Evolution Conference, Singapore 24 March 2010.

Dr. Kim Kyllesbech LarsenInternational Network Economics,Technology, T-Mobile

23 March 2010 Kim Kyllesbech Larsen, Technology - T-Mobile. 2

Story.

Peeping the Crystal ball

Prepared to be annoyed!

The 3G traffic Jam!

Releasing the pressure?

Greenfield …happy start-up,a tougher future!.

Key messages.


Changing Market - Tomorrow’s WorldSociety Trends and Technological Indicators

All IP/All Digital Networking and Sharing My-tech NOT Hi-tech

Trend to Digitize Trend to Socialize Trend to Individualize

Indicators: Digital Media; Cheap High Capacity data storage

Indicators: Warcraft; MySpace; Flickr; Second Life etc

Indicators: Web2.0; Personal & Social Networking; Facebook:

1.60+ bn. internet users50+ Tb user generated content per day.

4.1+ bn. mobile phone users

250 bn. Emails per day,more than 40% with 5MB

350+ m. active users with 65+ m mobile, 2.5+bn photos and 13+ m video uploads monthly.

20 hrs video uploaded every minute. 1bn. Downloads per day

400 m. registered users. Facebook has overtaken Skype in VoIP minutes.

25 m. mobile-tv users in Asia Pacific region

4.5 bn. $ worldwide mobile gaming revenue

86 m. active ebay users


Trends for 2010 and beyond.

Higher efficiency.Better connected.

New business.Mobile broadband traffic.

Growth markets in Asia.HH

1 2008: 30+%, 200+ mn and 2014: 50+% and 500+ mn.

PC penetration

Broadband access

today1

GPRS EDGE UMTS HSPA LTE

1

1:31:5

<1:300

<1:3000

Cost per Mega Byte.

Dongles (5%)

iPhone-like.

“Normal” devices.

Traffic volume: <65% >30%

<5%

>50% <50%

http://images.google.de/imgres?imgurl=http://wiki.aang-maps.de/images/Option_iCON_225_T-Mobile.jpg&imgrefurl=http://cgi.ebay.it/ws/eBayISAPI.dll%3FViewItem%26item%3D140288750602&usg=__ZFppTHeAwfsqeSRnVfCMUa83u3A=&h=248&w=350&sz=12&hl=de&start=15&tbnid=kQ996sk9ZA5A1M:&tbnh=85&tbnw=120&prev=/images%3Fq%3DUSB%2Bstick%2BHSDPA%2B21%26gbv%3D2%26hl%3Dde%26sa%3DX


Mobile broadband usage trends.

Social Networks

25%

Infotainment30%

Shopping10%

Streaming25%

Other10%

URL distribution Corresponding volume per URL

Social Networks

10%

Infotainment10%

Shopping15%

Streaming60%

Other5%


Mobile broadband traffic is expected to grow geometrically over the next 10 years.

Mobile10%

Nomadic20%

Stationary70%

Stationary79%

Nomadic20%

Mobile1%

Throughput 1 100+ (CAGR 50% pa)

Volume 1 300+ (CAGR 70% pa)

>

>

Today’s volume distribution Volume distribution 2020+


The mobile broadband traffic jam … … customer dissatisfaction …


The 3G traffic jam!

3G capacity and quality crunch within the next 2 – 3 years.

Slow down migration from 2G3G, migrate to NGMN instead.

New spectrum demand.

Re-farming existing 900/1800 MHz spectrum if possible (in time).

Empty 2G roads - in time?

5 MHz in 3G will only take up ca. 1 MHz in NGMN.

NGMN could mitigate the 3G capacity crunch.

Re-farmed 2G spectrum might be too late for mitigating the 3G capacity crunch.

The legacy mobile operator’s near-future.


Example 1 … speeding towards a 3G traffic jam?Timing issue with mitigating the 3G traffic jam with legacy 2G spectrum.

Customer adaptation.

215 MHz @ 1800 MHz 2G/NGMN.

210 MHz @ 2.1 GHz - 3G/HSPA.

2G

3G

NGMN

0%

20%

40%

60%

80%

100%

2008

A

2010

F

2012

F

2014

F

2016

F

2018

F

2020

F

2022

F

2024

F

0

10

20

30

0

5

10

15

-40

-20

0

20

2010

2012

2014

2016

2018

2020

2022

2024

-20

-10

0

10

DL+UL DL / UL

DL+UL DL / UL

3G capacity crunch

NGMNcapacityavailable

2010

2012

2014

2016

2018

2020

2022

2024

Asian market mobile operator with 13 million customers and

ca. 15% market share.

2012ish crunch likely

2014+ is capacity available!!!


Example 2 … speeding towards a 3G traffic jam? “Spare” 2G spectral capacity that mitigates the 3G traffic jam1.


230 MHz @ 1800 MHz 2G/NGMN.

210 MHz @ 2.1 GHz – 3G/HSPA.

DL+UL

DL+UL

0%

20%

40%

60%

80%

100%

2009

2011

2013

2015

2017

2019

2021

2023

2025

NGMN

HSPA

UMTS

GPRS

GSMDL / UL

DL / UL

-20

-10

0

10

20

2009 2013 2017 2021 2025

-10

-5

0

5

10

0

20

40

60

2009 2013 2017 2021 2025

0

10

20

30

European market mobile operator with 18 million customers and

ca. 20% market share.

3G capacity crunch

2013ish crunch likely

3G mitigation

“spare”NGMN

Capacity

Good timing!!

1 Provided regulatory approval.


Converging to average user experience.When average is simply not good enough – prepared to be annoyed .

Spectral efficiency & capacity.

3G is 3 – 5 more effective than 2G per Hz.

The 3G usage per Hz is at least 6 times (and growing) higher than in 2G.

Most mobile operators have less 3G spectrum than 2G spectrum.

Spectral efficiency of 3G cannot make up for the lower bandwidth.

3G spectrum will congest faster than might be expected from pure spectral efficiency considerations.

NGMN is at least 5 more effective than 3G per Hz (for broadband data).

0

20

40

60

80

2009 2013 2017 2021 2025

3G (UL+DL)-Hz per active user.

210 MHz @ 2.1 GHz – 3G/HSPA.

By 2015 there an active user will have only 20% of 3G Hz

available compared to 2008.

MIGRATION

TO

NGMN


How to perfect existing legacy spectrum1.Re-farm own spectrum and/or acquire new spectrum for NGMN.

Migration & re-farming to NGMN.

Illustration

3G(210 @ 2100)

2G(215 @ 1800)

3G

2G

Customer migration from

3G NGMN

Free

2G NGMN(215 @ 1800)

NGMN

New Customers

After some time 2G

to 4G migration.

1 Provided Regulatory approval for spectral refarming, Note this is far from given in most countries.


This is a place where socialism does not work.Most “fair use” policies address volumetric use and curbs speed after a volumetric limit has been reached.

Bandwidth (Mbps)

Time

Network limit

No relation between

QoS and Price

- Poor quality for all customers.

- Uncontrollable Opex and Capex demand.

- Accelerated new spectrum demand.

- Service (price) differentiated quality.

- Better control of network expansion.

- Less urgent new spectrum demand.

Time

Bandwidth (Mbps)

5% of base 20% of BW



Today’s non-QoS policy QoS-based policy

“Unlimited”

Gold

Silver

“Best effort”

Spectrum limit

Un-controlleddemand


T-Mobile UK& Orange TD-TV

UL(75 MHz)

DLUL(35MHz)

DL

UL(70 MHz)

TDD(50 MHz)

DL

900 MHz 1,800 MHz

2,500 MHz

UL(60 MHz)

DL

2,100 MHz

TDDpart TDD

2,300 – 2,400+ MHz

part TDDThis band provides interesting backhaul P2P options in some

Greenfield scenarios.

3,400 – 3,500+ MHz

Malaysia: WiMaxChina: TDD-LTE

UL DL

400 MHz

UL DL

700 / 800 MHz

TDD

TDD

(20 MHz) (15 MHz)

(20 MHz)

In use in China

TDD

BSNL in India

FDD & TDD landscape.It will be a challenge to find new and suitable FDD-based spectrum for NGMN migration (and 3G off-loading) in growth markets.

The 2.5 GHz is reserved for satellite applications in many parts of Asia.

Below 900 MHz relies on digital dividend availability.

Note: the above view is more in line with European and Asian spectrum landscape than US, e.g., 1700 MHz (AWS) used for 3G services and 1900 MHz for PCS/GSM services.

Low availability in Europe.


Greenfield attacker spectrum Issue


The growth-market Greenfield BWA’s “happy” short-term, a tougher future.

Lots of Hz per customer … high speed!

Better availability than fixed broadband.

Higher speed than HSPA+

Wireless DSL with demand-driven coverage.

ROI optimized.

Happy startup … plenty of quality.

Geometrical growth in demand.

Start-up quality difficult to maintain.

Hz per customer drops dramatically.

Demand for new spectrum demand and more efficient access.

Limited free cash available for growth and sustaining quality.

Tougher future … growth limitations.


Speeding towards a broadband traffic jam?Without additional spectrum the Greenfield will become growth limited compared to legacy mobile operators with more spectrum dimensions.


230 MHz @ 2.3 GHz spectrum.

TDD vs FDD

TDDUL+DL

WiMax (TDD)802.16e

NGMN (TDD)

(802.16m or TDD-LTE)

0%

20%

40%

60%

80%

100%

2008

2010

2012

2014

2016

2018

2020

2022

2024

802.16eWiMax

2nd NGMN

?

Modernize or NGMN

Technology migration decision

120 MHz @ 2.3GHz UL: 5 MHz (flexible, FDD is not). DL: 15 MHz (flexible, FDD is not).

Asymmetric UL/DL adjustment. Simpler RF design (i.e., no concurrent UL/DL). More sensitive to interference. Link-budget worse than FDD (i.e., coverage wise

more sites needed in likes-4-likes with FDD). Wireless DSL / nomadic business model.

-40

-20

0

20

2010

2012

2014

2016

2018

2020

2022

2024

BWA capacity crunch

With 130 MHz crunch delayed…


Greenfield BWA - how to perfect limited spectrum.Customer experience management for a Greenfield is very important.

Spectral efficiency & capacity.

NGMN is assumed to be at least 3 more effective than WiMax1 per Hz.

The NGMN usage per Hz expected to be fairly similar (initially) to WiMax.

Most BWA Greenfield’s have limited spectrum and rarely more than 130 MHz below 3 GHz.

Early migration to a more spectral efficient access technology will:

Sustain growth longer.

Sustain competition with legacy.

Migration from WiMax to TDD-LTE is not only about spectrum perfection.

Results in fundamental change in network and business rules.

1 i.e., WiMax 802.16e.

0

200

400

2009 2013 2017 2021 2025

220 MHz @ 2.3 GHz – WiMax.

In relative terms the Greenfield operator could end-up

disappointing its customer a lot more than a legacy might do.

BWA Greenfield player

3G/HSPA Legacyoperator


How to perfect limited BWA spectrum1.Re-farm own spectrum and/or acquire new spectrum for NGMN.

Migration & re-farming to NGMN.

1 Provided Regulatory approval for spectral refarming, Note this is far from given in most countries.

120MHz

NGMN110MHz

Illustration

WiMax 802.16e(130 MHz @ 2.3 GHz)

New subscriptions

?NGMN

WiMax

WiMax

NGMN


Summary.

Broadband traffic jam will be experienced byLegacy & Greenfield.

Existing spectral flexibility will depend on the rate of technologyuptake & migration.

The Greenfield spectrum position is growth limited impactingquality & business model.

09/04/23 21

Contact:

[email protected]: +31 6 2409 5202http://nl.linkedin.com/in/kimklarsen

Thank you very much!Acknowledgement: Michael Lai (P1 Malaysia), Dirk Schöneboom, Xi Bin, Richard Marijs, Stefan Wilhelm, Zhou Yi, Alan Yeo, Jordan Yeo, Denis Gautheret and many other talented colleagues in DTAG.

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